Aggregate Returns to Social Capital: Estimates Based on the Augmented Augmented-Solow Model

Hirokazu Ishise () and Yasuyuki Sawada

No CIRJE-F-413, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper estimates the aggregate output elasticity of social capital that characterizes the aggregate returns to social capital. With this aim, we apply Nonneman and Vanhoudt's (1996) augmented version of the augmented Solow model of Mankiw et al. (1992) by including social capital as an additional production input. The estimated output elasticity of social capital is approximately 0.1. While our results largely indicate that social capital positively affects economic growth, the magnitude of the effects is smaller than that of physical and human capital as well as labor inputs. Moreover, the median value of the implied aggregate return of social capital is approximately 9.77% at the global level and, in OECD countries, it is likely to be considerably smaller than the individual returns, suggesting the fallacy of composition. As a by product, the depreciation rate of social capital is estimated to be approximately 10% per annum which is significantly higher than that of physical capital.

Pages: 43pages
Date: 2006-04
New Economics Papers: this item is included in nep-dev and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cirje.e.u-tokyo.ac.jp/research/dp/2006/2006cf413.pdf (application/pdf)

Related works:
Journal Article: Aggregate returns to social capital: Estimates based on the augmented augmented-Solow model (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2006cf413

Access Statistics for this paper

More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().